General presentation of the Royal Dutch Shell Company:
The Royal Dutch Shell Group is a Dutch company that exercises its activities in the production and distribution of oil and natural gas. To better understand the activities of this group it is possible to categorise them into different sectors according to the turnover generated by each type of activity as follows:
Firstly, we know that the majority of the revenue of the Royal Dutch Shell Company is achieved through its refinery and distribution activities which account for 86.2% of this group’s turnover. This is followed by this group’s revenue from its 21 refineries and network of over 44,000 service stations around the world. It should be mentioned here that the group also manufactures petrochemical products such as olefins, aromatic products, solvents, ethylene, propylene, phenols and various additives as well as its activities related to the production of solar energy.
The rest of the group’s income, that is to say 13.8% of its turnover, is from the exploration and production of crude oil and natural gas. We should also note here that this company is currently developing its activities in the production of energy and fuel from wind power and oil sands.
It can also be useful to know how the group’s activities are distributed from a geographical point of view. Royal Dutch Shell achieves 30.6% of its turnover in Europe, 39.6% in Asia, Oceania and Africa, 23.1% in the United States and the remaining 6.7% from various other countries around the world.
Know the competition to Royal Dutch Shell shares:
- ExxonMobil: The primary direct competitor to Royal Dutch Shell is currently the American oil and gas company ExxonMobil Corporation. This is in fact one of the extra large petroleum companies with fields considered to be among the largest owned by a private company at the present time.
- BP Group: Then we find the BP Company which is a British company created in 1909 that exercises the activities of research, extraction, refinery and sale of oil and refined products. This has become the largest company in the United Kingdom since its merger with Amoco, Atlantic Richfield and Burmah Castrol. It is also the third largest petroleum company worldwide. The BP Group currently exercises its activities in approximately one hundred countries around the world and employs more than 80,000 people.
- Total: We would also monitor the French Total S.A. Group which is also a top oil and gas company and the largest French company in this sector in terms of turnover. It also happens to have the fourth largest stock market capital in the Euro zone. This group provides a full range of activities in this sector from the extraction of crude oil and natural gas through to the creation of energy and including refinery activities and retail sales. The Total Group also exercises its activities in the low carbon fuel sector and the production of electricity. It operates in over 130 countries at present and employs more than 100,000 people. It also operates more than 16,000 service stations worldwide, 3,500 of these in France alone through the brands Total, Total Access and ELAN.
- Chevron: Then we find the Chevron Corporation which is the second largest American company in this sector after ExxonMobil. This company operates its activities in around 180 different countries and in each sector of the crude oil and gas industry including the exploration and production, as well as refineries, the sale and transport of chemical products and the production of electricity. This company’s share price is notably included in the composition of the Dow Jones Index and can therefore be classified as among the ten largest companies worldwide in terms of turnover.
- ConocoPhillips: To conclude, the last major competitor to Royal Dutch Shell is the American group ConocoPhillips, a company that is specialised in the extraction, transport and processing of crude oil. This company notably owns and operates a network of service stations in a number of countries.
Strategic alliances implemented by the Royal Dutch Shell group:
- Rosneft: In 2007 the Royal Dutch Shell group signed a partnership agreement with the Russian petroleum company Rosneft relating to a strategic co-operation and the joint completion of projects relating to the exploration, extraction and transformation of hydrocarbons.
- Technip and Samsung: In 2012 the Shell Group signed an agreement to strengthen its partnership with Technip and Samsung relating to LNG floats.
- Total: In 2016 Royal Dutch Shell implemented a partnership with the Total Group relating to two major projects in Iran and the development of oil fields.
Introduction and quotation of the Royal Dutch Shell shares:
Le cours de l’action Royal Dutch Shell est actuellement coté sur le compartiment A du marché Euronext Amsterdam et intègre le calcul de l’indice boursier AEX.
The share price of the Royal Dutch Shell Company is currently quoted in compartment A of the Euronext Amsterdam stock market and is integrated in the calculation of the AEX stock market index.
The first observation that we note when completing a historical technical analysis of its share price is that this asset displays a high volatility.Its progress is particularly marked by strong medium term movements with some longer term trends.
Stock market data
It is of course primordial that you know certain general stock market information and some key facts and figures relating to this company.This is what we offer you here with a full summary of the stock market situation of this company asset that will assist you in better understanding the position of this group on the international stock markets:
- In 2017 the total stock market capital of the Royal Dutch Shell Company was around 132,742.30 million Euros.
- The number of shares issued by the Royal Dutch Shell Company and in circulation on the market currently stands at 4,597,136,050.
- The Royal Dutch Shell Company share price is currently quoted in Compartment A of the Euronext Amsterdam stock market in Holland.
- The Royal Dutch Shell share price is also included in AEX, the national Dutch stock market index.
- Shareholdings in the Royal Dutch Shell Company are as follows: 24.32% is held by the Euroclear Netherlands Company, 15.93% by the BNY (Nominees) group, 6.92% of the shares are held by the Black Rock investment fund, 5.45% by the Capital Group Companies, 4.02% by the company Chase Nominees Limited and 3.47% is held by the State Street Nominees Company.
To better understand how news and current events can influence the share price of the Royal Dutch Shell Company it is of course necessary to delve into the recent economic and financial history of this company.To do so we offer you the opportunity here to learn about recent events that have made a significant impact on this group.
During the decade following the year 2000 Royal Dutch Shell was the first company in the United Kingdom to cease using stock options as remuneration while the controversy over this issue was in full swing.
In 2004 the group made a public announcement relating to its intention to regroup all its activities under a single structure which would be named Royal Dutch Shell PLC.This company would then be quoted on the London Stock Exchange although its registered office would still be based in Holland.
Later, in 2015, the group made an announcement regarding a buyout offer of the BG Group for the amount of 47 billion pounds sterling which would be paid for partly through Shell shares and the rest in liquid funds.In the same year the Royal Dutch Shell Company purchased the European energy and natural gas trading activities of the Morgan Stanley Company.The amount paid for this transaction was not disclosed.At around the same time the group announced the layoff of over 6,500 employees due to a major drop in activity due to the fall in the price of crude oil.In 2015 it also sold its 33.2% market share in the Japanese refinery company Showa Shell Sekiyu to the Idemitsu Kosan Company for the sum of 1.4 billion dollars.Still in 2015 the Royal Dutch Shell Company registered a record loss of 6.8 billion Euros for its third quarter notably due to losses caused by abandoning projects in Alaska and Alberta.
In 2016 the group registered a new severe setback when it announced the layoff of over 2,200 workers following the buyout of the BG Group again due to the weak price of crude oil.In August of the same year the Royal Dutch Shell group sold its North Sea activities for the sum of 3.8 billion dollars as well as one of its oil fields in Thailand for the sum of 900 million dollars.
In 2017 the Royal Dutch Shell group announced the sale of its LPG (Liquefied Petroleum Gas) activities in Hong Kong and Macao to the company DCC.In November it also sold its share in the Woodside Petroleum Company for the sum of 2.7 billion dollars.Finally, at the end of 2017 the company announced the buyout of the First Utility Company, specialised in the distribution of electricity throughout Great Britain.
- First we would note that among this company’s principal advantages is its position among the extra large petroleum companies; it is one of the six largest crude oil and gas companies worldwide.
- The value of this brand is also significant as the Royal Dutch Shell group is positioned among the leaders of the energy sector worldwide. This enables it to benefit from a strong position in terms of negotiation and attract more clients.
- Still relating to the strengths of this group we would also draw your attention to the financial growth exhibited by this company from its creation to the present, notably due to a strong expansion strategy and the diversification of its activities.
- The investments undertaken by the Royal Dutch Shell Company in research and development are also an undeniable advantage that enables the company to offer increasingly innovative and technological solutions in the energy sector and thereby retain a comfortable operating margin against the competition.
- We also note the admirable ability of this group to form alliances with other large companies worldwide in order to increase its profitability and become more integrated in new sectors or markets through business or technological partnerships or the creation of joint ventures.
- To conclude we can of course also point out the current international expansion strategy of Royal Dutch Shell as being one of its major strengths. It should be remembered here that the group exercises its operations in over 90 different countries around the world and operates a huge network of service stations which enables it to be present throughout the fuel production and distribution chain.
- First of all, this group often encounters legal problems, resulting in financial losses and a tarnished brand image.
- The group's activities are also closely linked to the oil market.As a result, its profitability is as volatile as the price of this raw material, which is a notable weakness.
- Finally, the group is also often singled out for criticism because of human rights and environmental problems that degrade its brand image.